When market prices don’t work

January 28, 2006

Told ya so. This is how the price gouging system works. First, you raise your price higher and higher until people are shaken out of their inertia and begin to complain. Then, you bring it back down just far enough that they breathe a sigh of relief — but not down to where it began. Keep doing this periodically and eventually you’ll be selling gas for $3.00 a gallon and people will not only pay it willingly, they’ll be thankful that they’re not paying $3.50. Until 8 months later, when that’s what they are paying. All the while, the big oil companies are raking in obscene profits. And you and I can no longer afford anything because the price of oil drives up all other prices.

The annual record when adjusted for inflation is $2.50 a gallon, set in 1981, courtesy of the Arab oil embargo. Last year’s $2.47 average was the third-most-expensive year, according to the California Energy Commission, mainly driven up after Labor Day after Hurricane Katrina devastated Gulf Coast oil refineries.

Californians are now paying an average of $2.53 for a gallon of the cheapest grade of fuel. Last month, you could fill up for $2.16 in the South Bay.

The market “wants to go higher and the old records are vulnerable,” Tom Bentz, an oil broker in New York, told the Bloomberg News Service this week.

[Mercury News]
Dammit, where are the electric cars? And when are we going to wean ourselves from oil? Or are we waiting for the huge, looming middle east war to cut off all supplies and force us into a societal collapse?

8 comments

Where does an electric car get its electricity from? If you’re going to have an electric world that doesn’t rely on oil, you’ll need to switch to atomic power (or air polluting coal).

Oil prices are primarily controlled by OPEC, not American oil companies.

Oil is a commodity in the truest sense of the word, absolutely governed by the rules of microeconomics.

American oil companies may appear very profitable at the moment, but there have been times during the last 20 years when they were on the verge of bankruptcy because OPEC lowered the price of oil to a point below the production costs of fields owned by American oil companies. So, don’t get too angry at American oil companies for reaping profits under the current economic environment. What makes them profitable today can impoverish them, tomorrow.

If there’s anyone you should be upset with, it’s the Arabs. Not only do they mess with world oil supplies, sending shock waves through world economies, they also take some of those profits and funnel them to the likes of al Queda, Hammas (now a “legitimate” “political” “organization”), Islamic Jihad, and Hezbolah.

All true. I suppose what I’m most angry about is the seeming lack of forward thinking. If Chevron has $14 billion in profits this quarter — just THIS QUARTER — wouldn’t it be brilliant if they put just half of that into bringing alternative energies to market? Just one half of one quarter’s PROFITS, not revenues, and that would be more than anyone else seems to be spending on new sources of energy. For instance: $7,000,000,000, half of that quarterly profit, would pay for solar panels on 280,000 homes. That would replace an awful lot of oil for a long time, cut a huge amount of pollution, and charge our non-existent electric cars. If the Arabs are funneling profits to people who want to destroy us, we should funnel profits toward eliminating our dependence on them.

I haven’t yet seen any evidence that electric cars are either. A. Cheaper to operate or B. Consume any less energy. And until that evidence exists I don’t see them replacing the internal combustion engine anytime soon.

It would be easy enough to get people to switch to smaller more fuel efficient cars by taxing city cars based on engine size. 1.5 and 2 liter cars are fine in the big cities.

And the obscene oil profits are greed pure greed. People talk about the 80’s as the ‘Me’ generation well Bush and his partners in crime have taken personal greed to entirely new levels. One wonders how the US will ever recover from this pillage.

Well, I just base my wish for electric cars on common sense, not scientific data. It seems to me that the only way to power current cars is with fossil fuels. An electric car can get its electricity from a number of renewal sources, such as solar, wind, or hydro, which are non-polluting (as would be the car). And none of those sources of power require us to kowtow to the Arab world.

I agree, for cheap electricity, nuclear power is the only way to go, but for what ever reason the US hasn’t figured out how to do it properly. In Europe the nuclear plants are all identical and if they find a flaw in one the run around and update all the rest. In the US each plant is a different design built by a different company. And every single time they build a new one the cost of electricity goes UP?

Rather than a few huge nuclear plants why can’t we have more smaller versions scattered around, all of them the same design? They don’t need to be huge monstrosities, the Navy has nuclear Ships and Subs. If the nuclear plant is small enough to fit in a Sub (and run by a small crew) then the government knows how to make them small, compact and efficient.

I think electric cars make sense in the sun belt but with current technology they just aren’t feasible in the colder states. Anyone the lives in weather that sees zero or below knows what happens to batteries under subfreezing temperatures.

Like Gene I would love to see more solar, wind and hydro power. But at present these aren’t working well enough.

Solar is too inefficient, too slow to produce and takes up too much land.
Wind farms are better but still take up too much land. (we’re greedy for more land and hate to give it up)
Hydro seemed like a good idea but we’re now finding lots of problems with all the dams we built and are now starting to un-dam (de-dam?) rivers.

The problem in America today is most electricity is made by burning coal or natural gas. Both of which consume more energy and pollute more creating enough energy to run a small car than running that same small car with a clean burning gas engine. (Gene’s own car is a perfect example! Thanks Gene)

We have the technology. Yet we refuse to use it? Why is that?
I’ll bet it has something to do with money?

>We have the technology. Yet we refuse to use it? Why is that? I’ll bet it has something to do with money?

Yes it is about money – and no it isn’t about corporations. It’s about the people.

Yes – as in people don’t want to pay more for less in the short term.

Why pay $24,805 for a Prius when you could have a giant, roomy, Ford Explorer for $23,823? With towing capacity and a real truck look.

America is controlled by consumers. Corporations influence this of course through ads, but at the end of the day, we vote with our dollars. And our votes say “we want more now for less”, not “we want more for the future.”

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